Friday, December 08, 2017

Comment on Employment Report: Some Additional Hurricane Bounce Back

by Bill McBride on 12/08/2017 10:00:00 AM

The headline jobs number was strong at 228  thousand, probably somewhat due to an additional bounce back from the hurricanes, and above expectations.  The previous two months were revised up slightly by a combined 3 thousand jobs.

The September jobs report was revised up again (now up to 38 thousand), and that keeps the record job streak alive, now at 86 consecutive months (93 months if we remove the decennial Census hiring and firing).

Earlier: November Employment Report: 228,000 Jobs Added, 4.1% Unemployment Rate

In November, the year-over-year change was 2.07 million jobs. This is still generally trending down.

Average Hourly Earnings

Wages CES, Nominal and RealClick on graph for larger image.

This graph is based on “Average Hourly Earnings” from the Current Employment Statistics (CES) (aka "Establishment") monthly employment report. Note: There are also two quarterly sources for earnings data: 1) “Hourly Compensation,” from the BLS’s Productivity and Costs; and 2) the Employment Cost Index which includes wage/salary and benefit compensation.

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees.  Nominal wage growth was at 2.5% YoY in November.

Wage growth had been trending up, although the acceleration in wage growth stalled this year.

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.8 million, was essentially unchanged in November but was down by 858,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.
The number of persons working part time for economic reasons increased slightly in November. The number working part time for economic reasons suggests a little slack still in the labor market.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 8.0% in November.

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.58 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 1.62 million in October

This is the lowest level since June 2008.

This is trending down, but still a little elevated.

The headline jobs number was solid and the unemployment rate unchanged at a low level - both positive signs and a continuation of multi-year trends.  However wage growth was disappointing again.